I wrote this on an opposing post, just thought I would get the dialog open by posting here...
I am a Ethereum token holder, and more so, a DAO token holder, and i think the best thing for the network is to take the loss on the chin, and move on. This was not the view I held on Friday, but after listening to all parties involved, I made a u-turn on the argument.
First of all, I am in favour of a soft fork. Locking down all DAO related transactions whilst the community has time to figure out the best way to move forward is a good thing, and should yield the right result for everyone in the long term. Knee jerk reaction from the Ethereum Foundation, and DAO token holders was, the hacker has stolen funds from The DAO and this shouldn't be allowed to stand. This is however not the case, the DAO is structured in such a way that the Hacker was purely being rewarded for his activities, well within the rules set out by the DAO contract code.
"The terms of The DAO Creation are set forth in the smart contract code existing on the Ethereum blockchain at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413. Nothing in this explanation of terms or in any other document or communication may modify or add any additional obligations or guarantees beyond those set forth in The DAO’s code. Any and all explanatory terms or descriptions are merely offered for educational purposes and do not supercede or modify the express terms of The DAO’s code set forth on the blockchain; to the extent you believe there to be any conflict or discrepancy between the descriptions offered here and the functionality of The DAO’s code at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413, The DAO’s code controls and sets forth all terms of The DAO Creation."
Quoted from https://daohub.org/explainer.html
The reason I think the soft fork should be implemented is that the Ethereum foundation did back the project, and many people invested far more Ethereum than they would of otherwise. The DAO code was independently tested by security firms, and token holders in my opinion had good reason to feel at ease investing in the project. If the soft fork is adopted, I think that the Hacker should be offered a sizeable bug bounty in this period in exchange for returning the funds to the DAO. The hacker is not a 'terrorist' and has mearly exploited an opportunity which was explicitly fair as set out by the DAO code.
If this proposal is not accepted, then the child DAO holding the hackers funds should be frozen until (if ever) someone devises a way of retrieving the funds without using a hard fork. a single entity gaining 4% of the Ethereum market cap is really bad for market confidence in Ethereum, but so is any precedent set that protects smart contract code mistakes with a full refund. This is exactly the kind of scenario decentralised networks are trying to avoid, and anyone who was against 'the bankers bailouts', should be against this too.
Good thoughts. Thanks for sharing. Your position seems to hinge largely upon the terms of the DAO and its statement that the code would control. While a valid statement, it ignores two key points that I made in my original post: (1). That the terms of the DAO can't and don't supersede the "terms" of Ethereum in general, which can and does allow miners to collude to fork, and even reverse transactions, when doing so protects the network, and (2) everyone knew this going in. In Blockchains, miners rule, and miner collusion can be either good or bad depending upon its purpose and result.
I can only repeat the question already asked by others: why do you bother to use a blockchain then? Everything you describe can be achieved with the standard centralized technology and a multi-sig account.
Unlike centralized technology, blockchains are highly censorship resistant. Not censorship proof (since miners can collude), but highly censorship resistant. They are resistant because: (1) getting different miners with different political and economic agendas to collude is difficult and costly, (2) minors are only likely to collude when doing so obviously supports the network and token value and not when doing so undermines them (game theory 101), and (3) a sufficient number of miners generally cannot be legally compelled to collude.
The DAO situation provides a perfect example. Miners will only fork if they believe doing so supports network and token value and is worth the cost. And even if authorities wanted to compel miners to make DAO participants whole via a fork, they couldn't (both as a practical matter and as a legal matter).
My dream is to make blockchain censorship resistant both from the outside and the inside - there should be no way a majority could blacklist a single person and shut him up. As long as you play by the rules hard-coded in the blockchain, nobody, even the majority should be able to exclude you. This is how I understand being censorship resistant.